2 bln tons of coal reserves discovered in Southern Pakistan

11:00, October 02, 2010

The discovery of at least two billion tons of usable coal reserves has been confirmed in one of the exploration blocks of Tharparkar district in Pakistan's southern province Sindh, local media reported on Friday.

"The technical and economic feasibility report of the project proved that the coal was good enough to generate power, brushing aside the common perception that it could not be used in power plants because of high moisture content," said Khalid Mansoor, chief executive officer of Engro Energy.

"We have the report and it has established that this coal is economically, socially and commercially exploitable," he added.

The feasibility report prepared by multiple foreign consultants, including German RWE and English mining experts SRK, is the first document significant enough to convince banks on financing the project, he said.

According to sources, the total cost of constructing the open- pit mine and power plant will be around 1.5 billion U.S. dollars for open-pit mining.

Coal will be excavated in different phases, starting with 6.5 million tons a year and going up to 13 million tons.

Depletion of gas reserves, in the past couple of years, has compounded the energy crisis in the country. Production of natural gas, which accounts for 47 percent of the total energy needs, is almost 25 percent short of the actual requirement.

One of the world's largest coal reserves exist in Tharparkar district of Sindh. But excavation has remained elusive since the discovery of over 185 billion tons of reserves in early 1990s.

Experts and power industry officials are unanimous on the importance of using indigenous coal to generate electricity. The country is facing daily shortfall of around 4,000 MW.